Retailers understand the importance of competitive pricing data in today’s retail environment. According to RSR, competitive price data is the #1 most valuable input when it comes to price decisions. But it seems to remain a challenge for many retailers to get their hands on clean, accurate competitive pricing data.
“Approaches to Price Intelligence” examines a variety of different ways to monitor competitive prices online. It includes whether it should be in-house or outsourced, manual or automated, plug into enterprise solutions like Price Optimization or Business Intelligence as well as a few other considerations. The most common and most basic of these considerations is probably the build (in-house) versus buy (outsourced) debate, and so we thought we’d take a closer look at this topic.
But first you need to determine the evaluation criteria, and four of the most important are discussed below:
Product Development: This includes the human capital requirement to develop a technological solution. Factors to consider are employee salaries, experience, skills, time constraints etc.
Scope: This determines the number of products you can track.
Data Accuracy: It is important that the data be as current and accurate as possible, especially since you will be making decisions based on that data that could influence revenue in either a positive or a negative direction.
Scalability: The ability to expand the product capabilities (either deeper (i.e. more SKUs) or wider (more features and capabilities).
Although there are definitely some advantages to an in-house solution, especially if you only need to do very basic tracking on a few products, as you add products and solution requirements, the benefits of an outsourced solution, such as the ability to leverage expertise, cheaper costs (as number of products and features increase) and more accurate, quality checked data, quickly start to outweigh the advantages of building your own solution
But whether to build or buy a solution is most definitely not the only consideration you need to think of. To make sure you cover all the decision criteria and factors, read our Approaches to Price Intelligence white paper.